Following a call from DHHS Secretary Tommy Thompson to Congress (3/19/2002) ASPE conducted a study on states' experiences with minimum nursing home (NH) staffing standards. The report points to the increasing need regulators have to understand the effects of wage mandates and labor turnover on NH quality. Payment structures for NHs must take into account the complexity of care today's NH population requires and the level of staff required to provide appropriate and quality care. The proposed project will examine the relationship between NH labor turnover and'retention rates, and the quality of care provided in NHs across the United States and determine how those relationships are altered in the face of state policy changes affecting staffing or wage mandates from 1999 through 2005 using data that has never before been applied to nursing home staffing issues, and informed by labor economics theory. Using the US Census Bureau's Local Employment Dynamics Data Quarterly Workforce Indicators available in 32 states, the Online Survey Certification of Automated Reporting data on nursing home structure, staffing and regulatory compliance, facility casemix acuity and resident quality indicators, and a survey of state policies, regulations and initiatives regarding NH staffing standards and wages we aim to: (1) Characterize the inter-facility, intermarket, inter-state and inter-temporal variation in staff wages, staffing ratios, and turnover (entry and exit) among nursing home staff. (2) Model the relationship between wages, turnover and retention controlling for NH direct staff contracting practices and local market labor conditions. (3) Test the impact of state policies mandating nurse staffing levels and/or wages on nursing home wages, staff turnover rates and the quality of care experienced by NH residents, controlling for market factors. (4) Test a theoretical model of nursing wages and staff turnover that characterizes the mechanisms through which state policies targeting wages and staffing ratios indirectly impact quality of services provided, through their impact on the share of more efficient workers and lower staff turnover. (5) Use the theoretical model to assess the relative merits of alternative minimum nurse staffing and wage policies in terms of their relative cost and effectiveness.